Deutsche Bank is Sued by Dexia for MBS Fraud

Deutsche Bank has been sued for securities fraud by Dexia SA in Brussels related to over $1 billion worth of residential mortgage backed securities (MBS), according to Bloomberg. The case is Dexia SA/NV v. Deutsche Bank AG (DBK), New York State Supreme Court, New York County (Manhattan).

According to the allegations, Dexia invested over $1 billion in Deutsche Bank mortgage backed securities (MBS) in 32 offerings between 2005 and 2007. Dexia was the beneficiary of a $9.2 billion bailout by France and Belgium, in September 2008 as the financial crisis forced governments to rescue institutions across Europe. The complaint said that the loans and the mortgage backed securities were considered to be "pigs" and "crap" by Deutsche Bank internally. Deutsche Bank is said to have played an ever encompassing role in the mortgage origination and securitization process, during the same time it was betting against the U.S. housing market going back as far as 2005. According to the pleadings, Deutsche Bank had accumulated a massive $10 billion short position that paid off when the faulty loans backing the securities failed. In effect they were betting on the failure of the very loans and mortgage backed securities (MBS) that they marketed and sold to investors.

If you have suffered losses in mortgage backed securities (MBS), please contact our securities law firm for a confidential, no obligation consultation at 1-800-259-9010.

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